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India delays gas pricing reform until after elections

The Indian government’s surprise decision to delay the increase in natural gas prices until after the general elections in mid-May will not only cost upstream players billions of dollars in lost revenues, but it also highlights the political risks faced by investors

The price increase, due to take effect from the start of April, was expected to spur exploration in India’s oil and gas sector as demand for energy expands in Asia’s third-largest economy. Under the new formula, domestically produced gas prices would have jumped from between $4.20 and $5.70 per million British thermal units (Btu) to $8.40. The higher prices would have helped Reliance Industries and UK supermajor BP develop the KG-D6 Block, a deep-water gas block. Boosting production in the area, which holds India’s biggest gas discovery, is difficult at low prices. Furthermore, it’s uncertain whether gas prices will ultimately be revised upwards. If market reformers take power, they could re

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